NIBE Industrier AB (publ)

Group sales were SEK 9.650 billion and operating margin was around 9%, versus 8.1% a year ago. Management cited organic growth of just north of 7% in fixed exchange rates and net debt/EBITDA of 2.7. Hans Backman said operating cash flow was plus SEK 324 million versus minus SEK 376 million a year ago, while investments were cut by almost a third; depreciation was SEK 391 million, which he said should be a reasonable run rate. For the businesses, Climate Solutions had 10.3% organic growth and an operating margin of 10.3% (vs 9.2% previously mentioned for comparison), Element had 6.7% underlying growth and a 6.6% operating margin, and Stoves reported 10.1% sales decline, operating profit of SEK 37 million and operating margin of 4.4%. Forward guidance: Climate Solutions is expected to land within 13% to 15% full-year operating margin, Element within 8% to 11%, and Stoves within 6% to 8% as tariffs and weak consumer demand weigh on the year.

Gerteric Lindquist said the quarter showed NIBE is 'in the right way,' pointing to the fifth consecutive quarter of positive sales, margins and earnings. He emphasized that the company is benefiting from long-term demand for electrification and heat pumps, and said the US market has proven less subsidy-dependent than expected. His tone was confident but cautious: he repeatedly said the world is unstable, but argued that NIBE’s product mix, investments, and historical seasonal pattern support a stronger second half.

Hans Backman highlighted that the quarter’s underlying growth was stronger than the reported figure because currency reduced the visible growth, and he said Climate Solutions gross margin rose by more than a percentage point as volumes improved. He noted Element’s operating margin of 6.6% was helped by the 2024 cost-saving program and tight cost control, while Stoves held operating profit to SEK 37 million despite weaker volume. On the balance sheet, he said net debt had edged down further, leverage and the equity ratio improved, working capital remains on track toward the 20% target, and the company has 'pretty good cash on hand' for acquisitions.

Analysts focused on whether Climate Solutions can reach the 13% to 15% margin range, and management said the main drivers are volume growth, more rational production, a broader assortment and continued commercial momentum rather than extra cost programs. Questions also centered on the apparently lighter operating leverage in Climate Solutions; Backman said translation and transaction FX effects matter, while Lindquist said quarterly spending is not flexed aggressively and Q1 is seasonally weaker. On Stoves, management confirmed the new US Section 232 tariffs imply about SEK 150 million of annual headwind and said the target was lowered to 6% to 8% because the company will not offset it fully in the short term. Analysts also asked about Middle East-driven energy prices, France’s boiler policy, Sweden’s ROT change, and market share; management said these developments support long-term electrification demand, while NIBE is confident in hydronics but will enter air-to-air in France later this year.